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General Dynamics (GD) Q2 Earnings Top Estimates, Sales Up Y/Y

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General Dynamics (GD) Q2 Earnings Top Estimates, Sales Up Y/Y

General Dynamic's (GD) Information Systems and Technology segment's revenues increased 132.1% year-over-year, which drove the second-quarter's revenue growth.

General Dynamics Corporation GD reported second-quarter 2018 adjusted earnings from of $2.82 per share, which surpassed the Zacks Consensus Estimate of $2.49 by 13.3%.

Excluding one-time items, the company reported GAAP earnings of $2.62 per share, which came in 6.9% higher than the year-ago quarter’s earnings of $2.45 per share.

Total Revenues

General Dynamics’ second-quarter total revenues of $9,186 million surpassed the Zacks Consensus Estimate of $9,108 million by 0.9%. Reported revenues also increased 19.7% from $7,675 million in the year-ago quarter.

Cash Deployment

The company repurchased 0.9 million of its outstanding shares for $179 million in the second quarter.

Backlog

The company recorded a total backlog of $66.3 billion, up 13.2% year over year. Funded backlog at the quarter end was up 7.2% to $55.41 billion.

Segment Performance

Aerospace: The segment reported revenues of $1,895 million, down 8.8% year over year. Operating earnings of $386 million also declined 8.3% from the prior-year recorded figure of $421 million.

Combat Systems: Segment revenues rose 8.5% to $1,534 million. Operating earnings were also up by 4.9% to $236 million in the quarter.

Information Systems and Technology: The segment reported revenues of $2,442 million, which saw a massive surge of 132.1%. Operating income also surged 79.3% to $156 million.

Marine Systems: The segment’s revenues of $2,168 million were up 4.3% from the year-ago figure of $2,079 million. Operating income also improved 9.6% to $195 million.

Mission Systems: The segment’s revenues of $1,147 million were up 9% from the year-ago figure of $1,052 million. Operating income was in line with the previous year’s figure of $153 million.

 

General Dynamics Corporation Price, Consensus and EPS Surprise

General Dynamics Corporation Price, Consensus and EPS Surprise | General Dynamics Corporation Quote

Operational Highlights

Company-wide operating margin contracted 210 basis points (bps) to 11.8% from the year-ago quarter’s level of 13.9%.

In the quarter under review, General Dynamics’ operating costs and expenses rose 22.5% to $8,098 million.

Financial Condition

As of Jul 1, 2018, General Dynamics’ cash and cash equivalents were $1,862 million compared with $2,983 million as of Dec 31, 2017.

Long-term debt as of Jul 1, 2018 was $11,397 million, compared to the 2017-end figure of $3,980 million.

As of Jul 1, 2018, the company’s cash flow from operating activities was around $291 million compared with $1,010 million in the year-ago period.

Free cash flow from operations at the end of the second quarter was $612 million compared with $386 million in the previous year’s second quarter.

Zacks Rank

General Dynamics currently carries a Zacks Rank #4 (Sell).

Recent Defense Releases

Lockheed Martin Corp. LMT reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%. It currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Textron Inc. TXT reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6% from 57 cents in the year-ago quarter. It currently holds a Zacks Rank #2.

Hexcel Corporation HXL reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the prior-year figure of 67 cents. It currently carries a Zacks Rank #3 (Hold).

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General Dynamics Corporation (GD) : Free Stock Analysis Report
 
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